Here are 3 ASX dividend shares that have been rated as buys by brokers. One of the buys is Charter Hall Social Infrastructure REIT (ASX:CQE).
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It can be an interesting insight to know what brokers think of an ASX dividend share. The problem is that a single broker can be wrong or biased.
If you can get a consensus among brokers about which shares are best, then that may give a clue about what to buy and what to avoid.
Every so often MarketIndex collates the broker recommendations of 150 ASX shares and totals the buys, holds and sells for those shares. The higher or lower the average score the more of a strong buy, buy, hold, sell or strong sell that share is rated.
MarketIndex cautioned that a high dividend yield can indicate a falling share price or limited growth prospects.
Here are three of the ASX dividend shares rated as buys by brokers:
Charter Hall Social Infrastructure REIT (ASX CQE)
This is a real estate investment trust (REIT) which invests in social properties like early learning centres. However, it has recently expanded its investment mandate to consider other properties to add diversification.
As an example of this move, it recently announced the $122.5 million acquisition of a property that is under construction which will be the new corporate headquarters of Mater Misericordiae, Queensland’s largest Catholic not-for-profit health provider.
It had a 99.5% occupancy rate for its 395 properties with a weighted average lease expiry (WALE) of 12.7 years at 30 June 2020.
The ASX dividend share also just announced the acquisition of the South Australian Emergency Services Command Centre and multi-deck carpark which is currently under construction. It’ll be purchased for $23 million and fund the rest of the build for a total cost of $80 million. This has a 15-year lease with fixed 2.5% annual rent increases and two 5-year options.
It has previously provided distribution guidance of 15 cents per unit in FY21, which turns into a yield of 4.9% at the current Charter Hall Social Infrastructure REIT share price.
IOOF Holdings Ltd (ASX: IFL)
IOOF is now one of the largest financial advice businesses in the country after making the recent acquisitions from Australia and New Zealand Banking Group Ltd (ASX: ANZ) and MLC from National Australia Bank Ltd (ASX: NAB).
The IOOF share price is still down by 55% from the highs in January. The company recently announced its quarterly update. At 30 September 2020, its funds under management, advice and administration (FUMA) rose by around half a billion to $202.8 billion.
IOOF CEO Renato explained why IOOF is focused on financial advice: “We are at an inflection point of change for the Australian advice landscape. The value of quality financial advice has never been more apparent than it is today. Equally the need to create a professional business model has never been more apparent.”
Commsec has estimates for FY23 where IOOF has a projected grossed-up dividend yield of 10.7% and it’s trading at 9x FY23’s estimated earnings at the current IOOF share price.
Sydney Airport Holdings Pty Ltd (ASX: SYD)
Before COVID-19, Sydney Airport was paying a steadily-growing dividend from its cashflow as more passengers passed through the airport.
But COVID-19 has heavily impacted passenger numbers. In September 2020, total passenger numbers were down 96.4%. However, the company pointed out that travel restrictions between NSW and SA, between NSW and the NT, and between NSW and New Zealand are now being lifted.
Commsec has estimates for the FY22 year. Sydney Airport is projected to return to making a profit in FY22. It’s also estimated to pay dividends amounting to 20.5 cents per share, which equates to a dividend yield of 3% at the current Sydney Airport share price.
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.